NEW YORK/SAN FRANCISCO (Reuters) - Advanced Micro Devices
Inc <AMD.N> has delayed shipments of a key, high-end
microprocessor until the first quarter of next year and does
not expect to break even until the second quarter, the
chipmaker said on Thursday.

Its shares dropped as much as 6 percent as investors were
counting on AMD's server chip, called Barcelona, to win back
market share from its far larger rival, Intel Corp <INTC.O>.

AMD, the world's No. 2 supplier of computer processors, has
posted four straight quarters of losses as has struggled with
chip shipment delays over the last two years -- amid renewed
competition from Intel.

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At a meeting with analysts in New York on Thursday, AMD
executives apologized for the delays and promised improvements.

"We blew it, and we're very humbled by it," AMD Chief
Executive Hector Ruiz said, referring to missed commitments on
some quad-core chip products, which have four number-crunching
"brains" per processor.

"We're not doing to do that again," Ruiz said.

AMD said a 2.4-gigahertz version of its desktop computer
chip, Phenom, would also ship in the first quarter, according
to plans announced in November.

Charter Equity Research analyst John Dryden said AMD's
product plans will keep it well behind Intel, citing the timing
of AMD's Barcelona, Phenom processors as well as the Puma chip
for notebook computers.

A design problem with Barcelona has contributed to its
travails.

"The return to profitability is delayed and products are
delayed across all the platforms," said Dryden, noting that AMD
had been aiming for a profit in the current quarter.

AMD, which supplies about one-fifth of the world's computer
processors, said it would break even on an operating profit
basis at the end of the second quarter and turn an operating
profit for the third quarter.

Dryden said investors had hoped for an indication that it
would post a net profit for at least some quarters in 2008, but
added, "GAAP profitability I wouldn't expect until the second
half of 2009."

AMD 'NOT CHANGING ITS TUNE'

Analysts were also disappointed that AMD did not give more
details about its "asset-light" strategy to outsource more
manufacturing in order to reduce costs.

"The Street has kind of realized that AMD is not changing
its tune," said Hans Mosesmann, an analyst with Raymond James.
"Some people had hoped they would announce something dramatic
in a change to their business model, and they didn't," he
added.

The company expects to increase its market share
"tremendously" in 2008, and confirmed its outlook for
fourth-quarter revenue to be up, in line with seasonal trends.

AMD executives said they will work hard next year to get
back on track with shipments.

"We're not happy with our performance in quad-core, not
only because it affected our financials, but because it let
down our partners and customers," said Mario Rivas, executive
vice president for AMD's computing products group.

AMD shares, which have fallen 56 percent this year, fell 29
cents, or 3.2 percent, to $8.68 in afternoon trade on the New
York Stock Exchange, where they dropped as low as $8.42.

Intel shares were down 1.14 percent, or 31 cents, at $26.97
on Nasdaq.